Afternoon,

Another volatile day at the office. We had another day where the Dow and the S & P 500 were relatively strong and the NAZ was very weak. This always causes cross currents that make it difficult to trade. The Russell 2000 gaped up today and proceeded to sell off for the first hour of the day.  The first trade of the day happened after a trend-line break to the downside followed by a trader’s trick set up. The trend line was drawn from the pivot around 12:45 pm CST yesterday afternoon. The trade was up 1.50 points and the stop was moved to break even. The trade broke even. Trade 2 was a trend line break followed by another trader’s trick set-up below the 56 EMA. Trade 3 was a trend line break to the upside followed by a perfect trader’s trick set-up. Notice how the price pulled back to the 56 and the trend line that it just broke before taking off to the upside. Print this set-up off and study it as it does not get any better than this. Here is the chart for trades 1, 2 and 3.

Trade 1, 2, and 3

Click on chart to enlarge.

Trade 4 was a trend line break to the upside followed by another trader’s trick set-up. The trade came within one tick of stopping us out before make the objective. Trade 5 was a trend line break to the down side followed by a trader’s trick set up. The trade was up 1.50 points. Stop was moved to break even. Trade broke even. Here is the chart for trades 4 and 5.

Trades 4 and 5

Click on chart to enlarge.

The last trade of the day was a good looking set-up that did not work. It was a trader’s trick set-up after a trend line break to the upside above the 56 EMA. It was stopped out for a 2 point loss. Not all trade set-ups work even though they look like they should. That is why we always have stops in place to protect our principle. Here is the chart for trade 6.

Trade 6

Click on chart to enlarge.

So today was another tricky trading day.  There were 6 valid set-ups with3 winning trades, 2 break even trades and 1 losing trade for a net profit of $400, ignoring slippage and commission.

I know I keep saying that this market will get easier to trade. It will, I promise. I just don’t know when. Until then, it is imperative that a trader has a good strategy with strong money management rules.

Here’s to better fishing.

Best regards,

Ron

This is not a solicitation to buy or sell. 
There is a risk in any investment.